HR Compliance Audit for PE & VC Portfolio Companies in Europe
You're buying the company. You're also buying its employment liabilities.
Every portfolio company looks clean in the data room. Then you own it, and the gaps surface: contractors who should have been employees, unfunded severance, an undisclosed works council, contracts that do not hold up. That exposure is rarely in one place, and it tends to appear right when you are trying to close, integrate, or exit.
Europe HR Solutions delivers pan-European HR compliance audits for PE and VC funds and their portfolio companies, covering contracts, worker classification, collective and works council obligations, payroll, statutory compliance, and HR data across every entity in scope. One audit, one comparable report, one ranked view of where the exposure sits and what it is likely to cost.
Who We Are
HR Compliance Expertise for Funds and Their Portfolio Companies
Unlike law firms that review one entity at a time and bill per question, we assess every company in scope simultaneously using a unified methodology. You get one consolidated report with comparable findings across every entity and jurisdiction, sized and ranked, not a stack of separate legal opinions in different formats that no deal team can compare side by side.
Unlike financial and legal due diligence that stops at the balance sheet and the contracts on file, we assess the employment reality underneath: how people are actually engaged, classified, and paid across the footprint, and where that diverges from what the data room shows. We find the gaps that sit between entities, the ones that only surface once you own the company and someone looks at the whole operation at once.
Clients
Countries
Years Of Experience
Consultants
The Employment Exposure That Doesn't Show Up in the Data Room
Financial and legal diligence catch what is on the books. Employment exposure lives in how a company actually operates: who is classified as what, what was promised locally, and which obligations were never recorded. Across a portfolio, it compounds, and it is almost always found after close rather than before.
The contractors in the model might be employees
Target companies, especially younger ones, scale on contractors. Under the EU Platform Work Directive and national enforcement in Spain, the Netherlands, and Germany, the burden of proof has shifted: the company must show its contractors are genuinely independent. Where they are not, reclassification brings backdated social security, tax arrears, and penalties that can reach six figures per worker, a liability that transfers to you on close and that the seller’s data room rarely puts a number on.
Inconsistent contracts across entities surface during integration
In a roll-up or buy-and-build, each entity arrived with its own contracts, drafted by different advisors at different times. Probation periods over the legal maximum, unenforceable non-competes, IP assignment that does not hold up locally, and template GDPR clauses sit unnoticed until you try to harmonize terms across the platform. That is also the moment they become your problem to fix, at your cost.
Undisclosed collective and works council obligations
A works council that was never mentioned. A sector-wide collective agreement the target is bound by. Employee representation thresholds already crossed. These obligations do not appear in a standard financial diligence pack, but they constrain what you can do post-close, from restructuring to integration, and getting them wrong can stall a value-creation plan before it starts.
Severance, leave, and statutory liabilities that were never funded
Local severance regimes, accrued leave, deferred entitlements, and statutory obligations the target managed informally rarely sit cleanly on the balance sheet. In aggregate across a portfolio they can be material, and they hit hardest exactly when you act: at restructuring, at integration, or at exit when a buyer’s diligence finds what yours did not.
Nobody owns employment compliance across the portfolio
The fund tracks financials across every company monthly. Employment compliance has no equivalent owner. Each portfolio company runs its own HR, the operating partner cannot audit six entities personally, and the result is that exposure accumulates unmeasured across the portfolio until a deal, a dispute, or an exit forces it into the open.
Pre-Acquisition Employment Due Diligence
A focused employment-risk review of a target before you close, run to deal timelines. We assess contracts, worker classification, collective and works council obligations, and statutory liabilities, then size the calculable exposure so the findings can inform your deal decision. This is the employment diligence that financial and legal workstreams routinely miss.
Worker Classification Risk Assessment
We assess every contractor and atypical engagement across the target or portfolio against local classification tests: control, integration, financial independence, exclusivity. We identify which arrangements carry reclassification risk, estimate the financial exposure where it can be calculated, and recommend whether to restructure, reclassify, or formalize, so the liability is known and owned rather than inherited blind.
Post-Close & 100-Day Compliance Review
In the first 100 days, we map the employment compliance reality across the acquired entity or platform, flag what must be fixed before it compounds, and feed the findings straight into the value-creation plan. You get a prioritized picture while you still have the window and the leverage to act on it.
Portfolio-Wide HR Risk Assessment
A single, comparable assessment across every company in the portfolio, using one methodology and one ranking framework. The fund gets a consolidated view of where employment risk concentrates, which companies need intervention, and what remediation is likely to cost, the HR equivalent of the financial reporting you already run portfolio-wide.
Exit-Readiness HR Audit
Before you take a company to market, we surface and remediate the employment issues a buyer’s diligence will find, so they do not become a price chip or a deal delay. A clean, documented employment position is one fewer reason for a buyer to discount, and one more reason to trust the rest of the file.
Our Services / What We Audit
HR Compliance Audit Services for PE & VC Portfolios in Europe
Trusted by Funds and Portfolio Companies Managing Complex European HR
We help funds and their portfolio companies find, size, and close employment compliance gaps across every entity and market in scope.
We’ve been working with EHRS for a long time and it’s always the same pleasure to work together. Thank you for your confidence, your enthusiasm and your professionalism!
Lionel Paraire
Associate Director
Working with EHRS has helped the wider HR team in managing workloads, and our partners are starting to see the benefit of this relationship.
Paula Stillman
Head of HR
These experts are incredibly knowledgeable and professional. I can contact them and feel confident in knowing that I will receive accurate guidance.
Jess Clark
Employee Relations Specialist
Why Work With Europe HR Solutions
HR Compliance Audit Expertise Built for How Funds Actually Operate
Law firms review one entity at a time and bill per question. Financial diligence stops at what is on the books. Operating partners do not have the bandwidth to audit employment compliance across six portfolio companies personally. We built our audit methodology for the way funds actually work: multiple entities, multiple jurisdictions, deal clocks and hold periods, and a need to know not just whether there is risk but how much of it can be put in figures.
Findings a deal team can actually use
We do not hand you a 200-page legal memo or a vague list of HR concerns. You get a working document: each finding ranked by financial exposure, the calculable liabilities costed, and a clear view of what transfers to you and what it would take to fix. Decision-ready, in a form your deal process and your value-creation plan can use directly.
Pan-portfolio, simultaneous, comparable
We audit every entity in scope at the same time, using one methodology and one ranking framework. The fund gets a single consolidated view with comparable findings, not separate assessments from separate local advisors in formats that cannot be compared, which is the only way to see where portfolio risk actually concentrates.
Results on a deal clock, not a Big 4 clock
Phased findings delivered to your timeline, with the deal-critical issues surfaced first: classification exposure, undisclosed collective obligations, material liabilities. We move at the pace a transaction or a hold period demands, not the pace of an open-ended engagement.
From diagnosis to remediation, same team
We do not hand you a risk register and wish you luck. The team that finds the exposure builds the fix: contract harmonization, contractor restructuring, policy alignment, and the documentation a future buyer will want to see. No handoff, no re-procurement, no knowledge lost between diligence and value creation.
Frequently Asked Questions for Funds and Portfolio Companies
We're mid-deal and need employment diligence fast. Can you work to our timeline?
Yes. Pre-acquisition employment diligence is built to run on a deal clock. We scope to the timeline you have, surface the deal-critical exposure first, and deliver ranked, costed findings you can take straight into your deal decision.
Financial and legal diligence already covered the target. What do you add?
Financial diligence catches what is on the books and legal diligence catches what is in the contracts on file. We assess how the company actually engages, classifies, and pays its people, which is where the largest unrecorded exposure usually sits: classification, undisclosed collective obligations, and unfunded statutory liabilities, costed where they can be calculated.
Can you assess our whole portfolio in one go, not just one company?
Yes, and for many funds this is the point. We run a single, comparable assessment across every company in scope using one methodology and one ranking framework, so you can see where employment risk concentrates across the portfolio and which companies need intervention first.
We just closed and we're in the 100-day window. Is it too late to be useful?
The 100-day window is one of the best times to act. You still have the leverage and the mandate to fix what diligence missed before it compounds, and we feed the findings straight into the value-creation plan so remediation is part of the thesis, not a surprise later.
We're preparing a company for exit. How does this help the sale?
A buyer’s diligence will find employment issues, and each one becomes a price chip or a delay. We surface and remediate them first, so you go to market with a clean, documented employment position, removing reasons for a buyer to discount and supporting trust in the rest of the file.
Our investor has asked us to run an HR compliance audit. Can you work with us directly?
Yes. We work as readily with a portfolio company’s CHRO or People lead as with the fund. If your investor wants employment compliance checked, we run the audit alongside your team, give you the same ranked, costed findings, and help you act on them, so you can show your board a clear position rather than an open question. It is a process we run with you, not an inspection done to you.
What happens after the audit?
You get a prioritized report: every finding ranked by financial exposure, legal or deal urgency, and impact, with entity-by-entity action plans, owners, and cost estimates. From there most clients move straight into remediation with the same EHRS team, from contractor restructuring to contract harmonization, with no handoff.
Know what the employment exposure is likely to cost before it’s your problem. Start with a conversation.
Not sure where to start? Talk to an HR expert.
Whether you are a fund mid-diligence on a target, inside the 100-day window on a new acquisition, running a portfolio-wide risk review, preparing a company for exit, or a portfolio-company CHRO whose investor has asked for an audit, a short conversation can bring immediate clarity.
Our role is to understand what is in scope and where the employment exposure is likely to sit, and to outline the most effective path to a clear, ranked view you can act on.
No obligation, no pressure. Just clear, practical guidance from senior HR professionals who audit portfolio companies and acquisition targets across Europe every day.